MCLEAN, Va. and BEIJING — HNA Group — a Chinese aviation and shipping company — is set to acquire an approximate 25-per-cent equity interest in Hilton Worldwide Holdings Inc. from affiliates of Blackstone. Through this deal, HNA will establish a long-term strategic investment in Hilton and its planned spin-offs — Park Hotels & Resorts and Hilton Grand Vacations (HGV).
The transaction, valued at approximately $6.5 billion, or $26.25 per share, will reduce Blackstone’s interest in Hilton to approximately 21 per cent.
“We are pleased to welcome HNA Group as a long-term investor and strategic partner,” says Christopher J. Nassetta, president and CEO of Hilton. “HNA Group has a broad portfolio of successful travel and hospitality businesses and a proven track record of creating value in this industry. This mutually beneficial relationship will open new opportunities for our brands and guests around the world, particularly in light of HNA’s strong position in the fast-growing Chinese travel and tourism market, the largest outbound travel and tourism market in the world.”
As part of the transaction, HNA has entered into a stockholders agreement with Hilton and into similar agreements with Park Hotels & Resorts and Hilton Grand Vacations, effective upon closing. The agreement allows HNA to appoint two directors (one HNA member and one independent member) to Hilton’s Board of Directors, bringing the total to ten members.
“Hilton is an iconic global hospitality company with an unmatched portfolio of high-quality brands and a reputation for operational excellence,” says Adam Tan, vice-chairman and CEO of HNA Group. “This investment is consistent with our strategy to enhance our global tourism business and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms to provide travellers more choice, value and world-class services.”
The transaction is expected to close in the first quarter of 2017. Following Hilton’s previously announced spin-offs of Park and HGV, which are expected to occur near the end of the year, HNA will own approximately 25 per cent of all three companies.